Speaker 1: Hey friends, Josh here, founder of HR University and certified HR professional. And in this video, we'll be covering performance management to give you a clear understanding of what it is and how it relates to the workplace today. If you want to get more out of your employees, you need to know how to help them improve their performance. A performance management system allows you to manage your team by tracking performance and giving employees clear goals that they can strive for in their work. The more the employees strive for their goals, the higher their performance will be and the more rewards that they'll receive. This allows you to measure the performance of your team and give your employees a sense of achievement. And in this video, we'll be covering all the critical aspects about performance management and why it's important for companies and businesses. In the meantime, don't forget to subscribe to the channel so you can keep up to date with everything HR. Now let's go ahead and jump in. So what is performance management? Well, performance management is the process of evaluating an organization or a specific job function. It is a process to define set goals and objectives, monitor and assess performance, reward performance, and take necessary corrective actions when there is a deviation from the performance target. The performance management process provides information and tools that enable organizations to be more effective in managing their resources. It focuses on the performance of employees and organizations. And there are seven different types of performance management in HRM or human resources management. And the types of performances are determined based on the vertices included in the appraisal or review system. It can range from an employee's self-evaluation to feedback from other members of the business such as supervisors and colleagues, and can even include customer and investor feedback. The first type is general appraisal. This kind of performance management involves constant communication between the manager and the employee throughout the year about the performance. They communicate about the predetermined goals, objectives, and performance reviews, as well as setting new targets. The second type is 360 degree appraisal. In this type of performance management, the feedback about the performance and behavior of the employee is provided by peers and the manager of the employees. It is possible that the manager also provides some additional information about the behavior of the employee, but it's not the same as feedback from the peer group. The peer group gives an opinion to the employee based on observation of the behavior of the employee during a certain period of time. And the third type is technological performance appraisal. This appraisal is totally based on the technical knowledge of the employee. The technical expertise and capabilities of the employee are throughput and identified by the manager. Technical knowledge should be maintained by the manager through periodic training and the employee should be trained with new trends and technologies to keep their knowledge and skills at par. And the fourth type is employee self-evaluation. Employees evaluate their own performance by comparing their performance with standards set for them. The evaluation is used to identify strengths and weaknesses in the employee's performance and to provide a basis for future performance improvement. And the fifth type is manager performance appraisal. This evaluation process is different from the performance reviews because it evaluates the manager's performance, not the team's performance. And the performance of a team is evaluated by the quality of the work that is produced. And the sixth type of performance management is project evaluation review. In the project evaluation review process, supervisors and managers evaluate employees. Each employee's performance is then reviewed by a supervisor and manager. And based on this review, new projects are assigned to the employee. And the last type is sales performance appraisal. In this system, it's important to set a realistic sales target for the employee. A salesperson should be given proper training in order to understand the product line and customer requirements. They should be provided with appropriate sales aids like brochures and catalogs. The salesperson needs to make effective use of sales aids during the presentation of the product to the customer. And the process of performance management is designed to make employees more accountable to the company, which in turn allows employees to feel like they have a say in their job. It also helps managers find ways to improve employee performance. And performance management includes analyzing performance and identifying problems that may cause unsatisfactory employee performance. For example, the evaluation process helps identify areas in which employees are not meeting organizational goals and provides guidelines on how these problems can be corrected. Performance management is important for two reasons. First, it provides employees with an opportunity to learn about their own strengths and weaknesses and develop the skills necessary to become better employees. Second, it provides organizations with valuable information about how their employees are performing. This helps managers make sound decisions about how to use an employee's time and money. And performance management can be used by organizations to evaluate employees based on a variety of criteria, including individual job performance, organizational objectives, and the performance management system is a framework for evaluating the employee performance in order to identify strengths, weaknesses, and opportunities for improvement. The performance management system is a set of procedures and tools that are designed to help managers determine an employee's performance. The four elements of the performance management system are performance appraisal, job analysis, coaching or supervision, and last one is development training. Performance appraisals provide feedback about an employee's performance on specific tasks, skills, abilities, knowledge, or behaviors. Job analysis consists of an examination of the job and an analysis of the requirements of the job. This enables supervisors and employees to understand their own responsibilities and those of others in the workplace. Coaching and supervision help employees perform better by providing them with feedback on their performance. Supervisors must coach their employees to improve the quality of their work and to learn new skills. And development planning is a continuous process that's continued along with other steps of the process. Now let's talk about some of the significant advantages and disadvantages of the performance management system. The first major benefit is the documentation of everything related to performance of an employee. It can generate a performance graph in the future to make better decisions. Another significant benefit is that it creates a proper structure and feedback system between manager and employee. We can all set clear expectations and plan ahead using performance management system. Now let's talk about some of the most significant drawbacks of this system. The performance management system can create a negative employee experience if the feedback is not conveyed in a proper manner. The process is also time consuming and can take a lot of energy and time of the company. Another drawback is natural biases. Managers are responsible for multiple steps in the performance management system. So there's a natural bias on their part. And there we have it. We just went over what is performance management and why it matters. If you learned from this video and you feel like you have a better idea of what performance management is, then make sure to go ahead and like this video and subscribe to our channel so you can keep up to date with all the different HR topics that we cover. And I'll go ahead and see you on some of our following videos. Cheers.